Transnet Signs GE, Bombardier, Chinese Firms Among Winners In $4.7 Billion Locomotives Deal

As part of its $28 billion seven-year expansion plan, Transnet, a South African state-owned logistics company has awarded General Electric, Canada’s Bombardier and two Chinese train makers (CSR Corp  and China CNR Corp) a contract to supply over 1,000 trains.

The expansion plan will help Transnet upgrade its transport networks for easy logistics from Africa’s top economy by 2019.

The contract, which is South Africa’s single biggest corporate infrastructure projects, is expected to be effective by end of March 2014, following administrative approvals. The50 billion rand ($4.7 billion) contract will also see the consortium supply of 599 electric trains and 465 diesel trains.

Transnet Freight Rail CEO Siyabonga Gama said the figure is more than 40 percent higher than a previous government allocation for the commission. By 2019, all the 1,064 units will be delivered.

While delivery of the first locomotives will be delivered in mid-2015 and the last batch three years later, Transnet says the trains will mainly be used for transportation of general cargo.

Rail technology leader Bombardier Transportation South Africa (Pty) will supply electric locomotives which will include Bombardier's 240 TRAXX Africa locomotives. The dual-voltage electric locomotives, designed for speeds of up to 100 km/h are well known for their high reliability, excellent traction capabilities, energy efficiency and low maintenance cost.

On the other hand, General Electric Co. and China’s CNR Rolling Stock will supply 465 diesel locomotives while China’s CSR Zhuzhou Electric Locomotive will supply part the remaining electric engines needed in the project.

Transnet Chief Executive Brian Molefe said the contracts were splited between the four companies because "no single supplier would have the capacity or resources to deliver within the timelines envisaged."

Molefe said the deal would "transform the South African rail industry by growing existing small businesses and creating new ones," adding that it would also “create and preserve approximately 30,000 jobs."

Bombardier will build all its new locomotives in South Africa and is committed to localising more than 60 percent of the contract scope, signifying investments in local manufacturing capacity, training and further improving the skills development of local employees.

Hence, the project is expected to create a significant number of quality jobs and skills to complement overall developmental objectives.

Transnet which moves coal and iron ore and other commodities to the country's ports operates the country's main refined fuel pipelines. It also owns and manages about 20,000 kilometers (12,400 miles) of rail lines.